Many shipping companies issued price increase letters!

How many times have you experienced “price increases” in the shipping market?

The previous imbalance in supply and demand caused by the epidemic has caused global shipping prices to start skyrocketing.
In addition, freight increases usually occur during peak shipping seasons such as Christmas and Ramadan.
It is worth noting that the industry has seen a wave of price increases during the recent shipping off-season.

It is understood that the routes for this round of price adjustments are mainly concentrated in the United States, South America, Europe, the Red Sea and other regions.
Moreover, container freight rates will continue to rise in May. Many leading shipping companies have issued price increase letters one after another,
with some routes seeing an increase of nearly 70%. For a 40-foot container, the freight rate rises to up to $2,000.

Due to the outbreak of the "Red Sea Crisis", the global supply and demand relationship is once again out of balance, so the shipping market is ushering in this "price increase".
Under geopolitical threats, many container ships have chosen to abandon the Red Sea route and bypass the Cape of Good Hope. It is estimated that taking the route from the
Far East to Europe as an example, due to the detour, the one-way transportation time of the ship has been extended by 8 days, and the fuel cost has increased by US$650,000.
These additional costs will eventually be passed on to consumers, and freight prices will rise accordingly.

MSC

MSC announced that starting from May 1, 2024 (no later than May 14), new FAK rates will be implemented from all Asian ports to Northern Europe. The specific notice is as follows:

CMA CGM

CMA CGM will increase FAK rates from all major ports in Asia to all basic ports in the Mediterranean from May 1.

CMA CGM has also previously adjusted FAK rates from Asia to Northern Europe, to US$2,200 per 20-foot dry box and US$4,000 per 40-foot dry box/high box/refrigerated box.

Hapag-Lloyd

Hapag-Lloyd announced that starting from May 1, 2024, it will adjust the FAK rate from the Far East to Europe, as follows:

As the May Day holiday approaches, more goods are expected to be shipped before the end of this month. Freight rates are expected to rise on European routes where space is tight and on routes to the West America with larger cargo volumes. However, subsequent freight price trends will continue to depend on the development of the geopolitical situation. At present, there is still some uncertainty in the market.

What impact will this wave of shipping price increases have?

Since last year, the Panama Canal, one of the world's major shipping routes, has been severely drought-stricken, resulting in a significant reduction in the number of ships passing through it,
and the tolls paid by ships have also been several times higher than usual. Another "throat", the Suez Canal, was also blocked due to the Red Sea crisis, causing freight rates to soar.

For shipping companies, although the current freight rates seem ideal, the crisis in the Panama Canal is being resolved and traffic has gradually resumed.
If the Red Sea crisis is also resolved in the second half of the year and the supply and demand relationship returns to normal, freight rates may fall rapidly. Therefore,
shipping companies are seizing the opportunity of the current high freight rates to collect more cargo in order to earn enough profits in the first half of the year and prepare for possible market
fluctuations in the second half of the year.